The following correction was printed in the Guardian's Corrections and clarifications column, Wednesday May 14 2008

In the article below we said people on low incomes might be reluctant to use a prepayment scheme, although it could cut the cost for those with multiple prescriptions, because payment had to be by direct debit. In fact other payment methods, including cheque, postal order and debit or credit card, are available

Cancer patients and others who need long-term medication are endangering their health by not taking the drugs they need because they cannot afford prescription charges, charities warned yesterday.

Citizens Advice - which, along with Macmillan and other major patient organisations, is lobbying the government to scrap the charges - said the outdated rules penalise people on low incomes and cost the NHS more in the long run by putting patients back in hospital.

"Patients are suffering and that is not acceptable," said Liz Phelps, a social policy officer at Citizens Advice. "The NHS has had huge amounts of extra money over the past years and nothing has been spent on prescription charges."

The charges have resulted in 800,000 people not getting the drugs their doctors prescribe, according to the charity's research. They include people with cancer, asthma and HIV, treatments for which are not on the NHS list of charge exemptions. The list was drawn up in 1968 and includes diabetes, which was recognised as a condition that needed long-term medication but not others for which preventive drugs have since been developed.

"We feel it is chronically out of date," said Anna Brosnan at Macmillan. "People are living 10 years and more after cancer. If you were a diabetic who had cancer, you would get free prescriptions, but if you are a cancer patient you still have to pay.

"We find a lot of cases where cancer patients aren't getting the prescriptions their doctors have prescribed for them. They are going to the surgery saying - which ones are most important?"

Most people with long-term conditions are on several drugs at a time. A single prescription costs £7.10, but four would cost nearly £30 and might have to be renewed every month or two.

Phelps said Citizens Advice raised the problem with the government in 2001. "It is what we continually see in our bureaux - a group of people in poor health and on low incomes who are not getting their prescriptions. It is very worrying," she said.

The exemption system is also too complicated, and many people who might be able to claim do not know they can, she said. People on income support are entitled to free prescriptions, but not those on housing or council tax benefits.

There is a pre-payment scheme, which can cut the cost for people who have multiple prescriptions to about £100 a year. But it has to be paid by direct debit, something many on low incomes are reluctant to do for fear of incurring bank charges.

The government argues that 88% of prescriptions are free but most of those are for children and for people over 60. In 2001 the government admitted that 80% of 18- to 59-year-olds pay. The government has declined to update that figure since.

In July 2006, the health select committee called for a review on prescription charges. The government agreed to conduct an in-house investigation and promised the results by July 2007. A year later, the government instead announced that it would prepare a paper for autumn 2007, but it failed to do so.

This week Kevin Barron, the chair of the health select committee, asked in the House of Commons when the delayed paper would appear and was told it would be sometime this summer.

Last year, charges generated £430m for the Treasury. Phelps says it is impossible to improve the system without that figure falling. "We're challenging that," she said.

In a statement, the Department of Health said: "Prescription charges provide a valuable contribution to the NHS in England ... Abolishing them would significantly reduce the money available to deliver other health priorities."

Case study: 'I used to pick and choose my drugs'

Barbara Talbot has been undergoing treatment for cancer since 1995. She has been given hundreds of prescriptions for different drugs in that time. She wonders whether, if she had been able to afford them, she might be free of the disease.

"I used to look at my drugs and think what can I afford," she said. "What do I really need? I used to pick and choose." She will have further tests next week. "If I had been able to get some help and take the drugs I should have taken, would I have this problem?"

Talbot had to take a great deal of time off from her job as a hotel restaurant and bar manager after synovial sarcoma, which attacks the soft tissue of the ankle, was diagnosed. She had to travel from Norfolk to London for treatment. "Sometimes the hospital would make an appointment at a time when you had to get the really expensive ticket," she said.

As well as the cancer medication, she was being prescribed painkillers, anti-sickness drugs and drugs for insomnia - around six prescriptions at a time, sometimes once a month and sometimes once a fortnight.

"I decided I couldn't afford this ... I didn't know how to get help," she said. A single mother, Talbot did not want to admit she was not coping. So she skipped some of the drugs.

"When they decided I had to have radiotherapy in London, I decided I was not going to do it. I would have lost my house," she said.

Her doctor then realised she had problems and put her in touch with a Macmillan nurse, who showed her how to claim various allowances. She is in no doubt that prescription charges need to be cut. "By putting them up and up, they are killing people," she said. "It is the patient who is suffering."